The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) tool as a method to identify stocks likely to beat quarterly earnings estimates. This proprietary model compares the Most Accurate Estimate to the Zacks Consensus Estimate, incorporating the Zacks Rank, and has historically shown that stocks with a Zacks Rank #3 (Hold) or better and a positive ESP produced positive surprises 70% of the time, yielding an average annual return of 28.3% over a 10-year backtest. Travelers (TRV) and Allstate (ALL) are cited as current examples, both holding a Zacks Rank #3 with positive ESPs of +7.28% and +20.09% respectively, indicating a strong probability of exceeding analyst expectations in their upcoming reports.
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ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. If you wish to go to ZacksTrade, click OK. If you do not, click Cancel. Why Investors Need to Take Advantage of These 2 Finance Stocks Now Read MoreHide Full Article Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise. Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises. Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter. The Zacks Earnings ESP, Explained The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price. In fact, when we combined a Zacks Rank 3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest. Stocks with a ranking of 3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of 2 (Buy) and 1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank. Should You Consider Travelers? Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Travelers (TRV - Free Report) earns a 3 (Hold) right now and its Most Accurate Estimate sits at $5.86 a share, just seven days from its upcoming earnings release on October 16, 2025. Travelers' Earnings ESP sits at +7.28%, which, as explained above, is calculated by taking the percentage difference between the $5.86 Most Accurate Estimate and the Zacks Consensus Estimate of $5.47. TRV is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. TRV is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is Allstate (ALL - Free Report) . Slated to report earnings on November 5, 2025, Allstate holds a 3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $7.20 a share 27 days from its next quarterly update. Allstate's Earnings ESP figure currently stands at +20.09% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $6.00. TRV and ALL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report. Find Stocks to Buy or Sell Before They're Reported Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >> Should You Invest in The Travelers Companies, Inc. (TRV)? Before you invest in The Travelers Companies, Inc. (TRV), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy. Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.) See More Zacks Research for These Tickers Normally $25 each - click below to receive one report FREE: Image: Bigstock Why Investors Need to Take Advantage of These 2 Finance Stocks Now Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise. Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises. Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter. The Zacks Earnings ESP, Explained The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price. In fact, when we combined a Zacks Rank 3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest. Stocks with a ranking of 3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of 2 (Buy) and 1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank. Should You Consider Travelers? Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Travelers (TRV - Free Report) earns a 3 (Hold) right now and its Most Accurate Estimate sits at $5.86 a share, just seven days from its upcoming earnings release on October 16, 2025.Travelers' Earnings ESP sits at +7.28%, which, as explained above, is calculated by taking the percentage difference between the $5.86 Most Accurate Estimate and the Zacks Consensus Estimate of $5.47. TRV is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. TRV is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is Allstate (ALL - Free Report) . Slated to report earnings on November 5, 2025, Allstate holds a 3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $7.20 a share 27 days from its next quarterly update. Allstate's Earnings ESP figure currently stands at +20.09% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $6.00. TRV and ALL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report. Find Stocks to Buy or Sell Before They're Reported Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>Should You Invest in The Travelers Companies, Inc. (TRV)? Before you invest in The Travelers Companies, Inc. (TRV), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy. Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.) The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) methodology as a robust indicator for identifying stocks likely to exceed quarterly earnings estimates. This proprietary model, which compares the Most Accurate Estimate to the Zacks Consensus Estimate and incorporates the Zacks Rank, has demonstrated significant historical efficacy, producing an average annual return of 28.3% over a 10-year backtest when applied to stocks with a Zacks Rank 3 (Hold) or better and a positive ESP. Such stocks have historically delivered positive earnings surprises 70% of the time. Travelers (TRV) and Allstate (ALL) are presented as current examples fitting these criteria. TRV, with an upcoming earnings release on October 16, 2025, holds a Zacks Rank 3 and a positive Earnings ESP of +7.28%, derived from a Most Accurate Estimate of $5.86 against a consensus of $5.47. ALL, reporting on November 5, 2025, also carries a Zacks Rank 3 and an even stronger positive Earnings ESP of +20.09%, based on a Most Accurate Estimate of $7.20 versus a consensus of $6.00. These positive ESP figures for both TRV and ALL suggest a high probability of beating analyst expectations in their respective upcoming reports. This aligns with the model's historical performance, indicating potential for positive stock price reactions post-earnings, as market rewards often follow positive earnings surprises.
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